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Georgia MDL Court Muddles Utah Law

We aren’t going to mince words today. We don’t likeChristiansen v. Wright Medical Technology Inc., MDL 2329, 2016 U.S. Dist. LEXIS 46409 (N.D. Ga. Apr. 5, 2016). It is an opinion on post-trial motions in a case that went to trial in the Conserve Hip Implant Products Liability Litigation. It’s a beautiful spring day here in the Mid-Atlantic and we hope that’s true where you are. If it is, and if anything in this post makes you interested in the greater details and nuances of the decision, we recommend taking it outside, sitting under a tree, and enjoying some fresh air. You should at least have pleasant surroundings while you try to get through it. It’s long, and tedious, and frankly, muddled. So, we are going to try to focus in on the key parts – so that we might also try to get out and enjoy some of this fine weather.

Christiansen is a hip implant case. It went to trial on 5 theories of liability: strict liability design defect, negligent design defect, fraudulent misrepresentation, fraudulent concealment, and negligent misrepresentation. Id. at *2-3. Apparently the court had dismissed plaintiff’s failure to warn claim on summary judgment. Id. at *69 n.18. The jury ultimately returned a verdict finding the hip implant was defectively designed and caused plaintiff’s injuries and awarded $550,000 in compensatory damages. The jury also found in favor of the defendant on the fraudulent misrepresentation and concealment claims, but awarded another $450,000 to plaintiff on his negligent misrepresentation claim and $10 million in punitives. Id. at *18.

But that wasn’t the jury’s first verdict. It’s first verdict, delivered days earlier, answered the first question on the Verdict Form – do you find the hip implant was defectively designed – in the negative. Id. at *6. While that should have been the end of the inquiry, the jury didn’t understand the instruction to not go any further and they kept answering the verdict form. So, they went on to find that defendant had made negligent misrepresentations and awarded plaintiff $662,500 in compensatory damages and $2.5 million in punitives. Id. at *7.

Clearly the jury was confused. Clearly the responses on the verdict form were inconsistent. But, just as clearly – a unanimous jury found that the hip implant was not defective. We, like the defendant, believe that’s where the case should have ended. Without a defect, plaintiff had no right to recovery against defendant. Id. at *5. That’s why the verdict form was written the way it was. The jury may have mistakenly gone on to respond to the question about misrepresentation – but that shouldn’t have mattered.

Instead the court sent the jury back with the form and told them to read it again. When they still didn’t understand, the court decided it needed to be rewritten. You read that right. After the jury had deliberated to a verdict, the court decided to rewrite the verdict form and send the jury back to deliberate a second time. Maybe that’s been done before, but we’ve never encountered it. It plainly should have been a mistrial at worst, and a defense verdict at best.

Anyway, then the court re-charged the jury and sent them back with modified – pro-plaintiff – instructions. At this point, a new wrinkle is added. With the new instructions – the jury is no longer unanimous. One juror is no longer on board. We, like the defendant, think this juror likely understood the first verdict form and now disagreed with the remaining jurors’ changing the answer to the defect question, as the sole reason to change the answer to that question was to award the plaintiff money. The facts hadn’t changed. The charge hadn’t changed. What had changed was the jury’s understanding that they had to say yes to question 1.

Mistrial now?

No.

Instead, the court purged the jury of its evidently most pro-defense member, and with him so too disappeared those parts of the verdict form that had previously favored defendant.

The defendant challenged the verdict on the original no-defect ruling being dispositive, juror confusion, and on the dismissal of the juror. Not surprisingly, given that the same judge had made these prior rulings, that challenge was to no avail. We’ll leave the details to your leisure time reading. Id. at *22-55.

The flubs surrounding the verdict, however, were not the only problems with this case. Defendant had ample substantive challenges as well. The most significant of which was the court blatantly ignoring Utah law on comment k and design defect. While comment k is applied differently state-to-state, make no mistake that Utah is one of the most solid comment k states for prescription products:

We agree with the principle comment k embodies, that manufacturers of unavoidably dangerous products should not be liable for a claim of design defect. We are persuaded that all prescription drugs should be classified as unavoidably dangerous in design because of their unique nature and value, the elaborate regulatory system overseen by the FDA, the difficulties of relying on individual lawsuits as a forum in which to review a prescription drug's design, and the significant public policy considerations. . . .

Grundberg v. Upjohn Co., 813 P.2d 89, 95 (Utah 1991). Based on this, we don’t understand how the design defect claims even made it to trial. But, since they did, and since Utah law is so strong, the jury charge should have been clear. Nope. The Utah model jury instruction on comment k says that to establish a product is unavoidably unsafe, a defendant must prove that “(1) when the product was made, it could not be made safe for its intended use even applying the best available testing and research; and (2) the benefits of the product justified its risk.” Christiansen, at *61. Easy enough for a prescription-only medical device. But the Christiansen court tacked on a third requirement. Defendant also had to prove that the device “was accompanied by proper directions or warnings.” Id. at *63. Not only is this not Utah law (the citations in the opinion are to Georgia, not Utah law), but there was no warning-related claim in this case. That’s right, after failure to warn was dismissed on summary judgment, the court brought it back under the guise of (certainly not Utah) comment k. But more than that, the court effectively shifted the burden at trial to defendant to prove its warning adequate.

And when the jury found the device was defective, guess which is the only element of the court’s comment k charge it found defendant failed to prove – warnings. Id. at *65. So, if the court had correctly applied Utah law at the outset, the design defect claim would have been dismissed. If the court had correctly charged the jury on Utah law, the jury would have found in favor of defendant. Two strikes. The third was finding no error. Id. at *66-75.

At this juncture, we have to point that this process was entirely ultra vires under Erie v. Tompkins, 304 U.S. 64 (1938). As we have pointed out many times in the past -- a federal court sitting in diversity is not supposed to create new expansive forms of state-law liability, as this court did – twice – with comment k and design defect.

Finally, on the misrepresentation and concealment claims, the jury found for the plaintiff on negligent misrepresentation based on statements by a sales rep that went beyond the package insert. The jury did not find defendant’s actions rose to the level of fraudulent conduct. But the court went on to allow a punitive damages claim anyway based on reckless indifference to a “substantial risk.” But the decision seems to ignore the substantiality of the risk, and allows punitive damages solely on the basis that the device had not been adequately tested and the risk wasn’t known, not that it was actually substantial. Id. at *95-97. That’s not proper either, as our post last year on substantiality and punitive damages points out, both Utah and Georgia require a high likelihood of injury before punitive damages are allowed. Action Marine, Inc. v. Continental Carbon Inc., 481 F.3d 1302, 1313 (11th Cir. 2007) (punitive damages permissible “where the actor believes that the consequences of his act are substantially certain to result from [it]”) (applying Georgia law) (emphasis added); Daniels v. Gamma W. Brachytherapy, LLC, 221 P.3d 256, 269 (Utah 2009) (punitive damages permissible where the conduct involved a “high degree of risk”) (following Restatement (Second) §500) (emphasis added).

While the court reduced the amount of the punitive award to $1.1 million, under the evidence described in the opinion, punitive damages had no business going to the jury in the first place.

There is a lot going on in this decision and most of it is bad. We hope the defendant has better luck with a do-over on appeal than it did with the jury’s do-over verdict.